Bangladesh's power sector is haemorrhaging billions of dollars each year not because of a single policy failure, but due to a toxic combination of excess capacity, one-sided contracts, heavy import dependence, weak governance and a sharp depreciation of the taka, sector insiders and analysts say.
The National Review Committee (NRC) recently estimated annual losses in the power sector at around $1.5 billion, largely attributing the damage to unfavorable power purchase agreements.
But many energy experts argue that this headline figure oversimplifies a much deeper, long-running structural crisis.
Those closely tracking the sector say the losses do not fully reflect historical realities and cannot be understood without examining how policy priorities shifted after 2015.
Until around 2015, Bangladesh struggled with frequent power outages and inadequate generation. Since then, the problem has flipped.
The crisis today is no longer about scarcity but surplus: too much installed capacity, slower-than-expected demand growth and policies that failed to adapt to changing economic realities.
According to an analysis by the Institute for Energy Economics and Financial Analysis (IEEFA), Bangladesh's power sector import dependence rose to about 65% between FY2018-19 and FY2024-25, driven largely by fossil fuel imports.
